TOMS RIVER, N.J., April 24, 2014 (GLOBE NEWSWIRE) -- OceanFirst Financial Corp. (Nasdaq:OCFC), (the "Company"), the holding company for OceanFirst Bank (the "Bank"), today announced diluted earnings per share of $0.28 for the quarter ended March 31, 2014, as compared to $0.26 for the corresponding prior year quarter.

The Company announced that the Board of Directors declared its sixty-ninth consecutive quarterly cash dividend on common stock. The dividend for the quarter ended March 31, 2014 of $0.12 per share will be paid on May 16, 2014 to shareholders of record on May 5, 2014.

The next step in the Company Executive Management Succession Plan was also disclosed. Upon the expiration of CEO John R. Garbarino's current employment agreement on December 31, 2014, President and COO Christopher D. Maher will succeed him as CEO. Mr. Maher's amended employment agreement will continue through June 30, 2017. Mr. Garbarino will remain on the Board of Directors where he currently serves as Chairman. "I am pleased we are able to plan an orderly transition of my CEO responsibilities to such a highly qualified executive as Chris Maher," said Garbarino. Maher also commented, "During John's 43 year career with the Bank and 18 year tenure as CEO of the Company, OceanFirst has demonstrated an enviable record of developing value for shareholders. Together we are now working closely on a strategic plan delivering more robust growth."

Results of Operations

Net income for the three months ended March 31, 2014 was $4.7 million, or $0.28 per diluted share, as compared to net income of $4.4 million, or $0.26 per diluted share for the corresponding prior year period.

Net interest income for the quarter ended March 31, 2014 increased to $18.1 million as compared to $17.2 million for the same prior year period, reflecting an increase in the net interest margin partly offset by lower interest-earning assets. The net interest margin increased to 3.36% for the quarter ended March 31, 2014 from 3.16% for the same prior year period. The yield on average interest-earning assets decreased to 3.68% for the quarter ended March 31, 2014, as compared to 3.69% for the same prior year period. Despite the one basis point decline, the asset yield benefited from a shift in the mix of earning assets as average loans receivable, net increased $33.1 million while average interest-earning deposits and short-term investments decreased $56.6 million, as compared to the same prior year period. The cost of average interest-bearing liabilities decreased to 0.37% for the quarter ended March 31, 2014, as compared to 0.61% for the same prior year period. The decrease was partly due to the prepayment of $159.0 million of Federal Home Loan Bank ("FHLB") advances with a weighted average cost of 2.31% early in the fourth quarter of 2013. Average interest-earning assets decreased $26.3 million for the quarter ended March 31, 2014, as compared to the same prior year period, as excess liquidity was allowed to run-off.

For the quarter ended March 31, 2014, the provision for loan losses was $530,000, as compared to $1.1 million for the corresponding prior year period. The decrease for the quarter ended March 31, 2014 was primarily due to a reduction of $590,000 in net charge-offs, as compared to the same prior year period. Non-performing loans decreased $39,000 at March 31, 2014, as compared to December 31, 2013, and by $2.1 million, as compared to March 31, 2013.

For the quarter ended March 31, 2014, other income increased to $4.0 million, as compared to $3.4 million in the same prior year period. For the quarter ended March 31, 2014, wealth management revenue increased $113,000 as compared to the same prior year period, partly due to an increase in assets under administration to $216.5 million at March 31, 2014 from $176.8 million at March 31, 2013. Fees and service charges increased $144,000, as compared to the same prior year period due to higher retail and commercial checking account fees. For the quarter ended March 31, 2014, the net gain on the sale of loans amounted to $132,000, as compared to a loss of $174,000 in the same prior year period. The net loss on the sale of loans for the quarter ended March 31, 2013 was adversely impacted by a provision of $975,000 added to the reserve for repurchased loans and loss sharing obligations, as compared to no provision in the current quarter. The prior year provision was related to loans sold to the Federal Home Loan Bank as part of its Mortgage Partnership Finance program. Excluding the provision for repurchased loans, the gain on sale of loans was adversely impacted by a decrease in the gain-on-sale margin and a reduction in loans sold to $10.3 million for the quarter ended March 31, 2014, as compared to $36.8 million for the corresponding prior year quarter, as increasing longer-term interest rates reduced one-to-four family refinance activity.

Operating expenses amounted to $14.3 million for the quarter ended March 31, 2014, as compared to $12.7 million in the same prior year period. Compensation and employee benefits expense increased $1.1 million for the quarter ended March 31, 2014, as compared to the same prior year period due to personnel additions in revenue producing areas. Marketing expenses increased $282,000, as compared to the same prior year period, primarily due to a promotional campaign to attract retail checking accounts and incent bankcard usage. The promotion resulted in the acquisition of 1,200 new checking relationships in the first quarter. Occupancy expenses for the quarter ended March 31, 2014 include $180,000 in snow removal costs, a $130,000 increase over the same prior year period. Excluding non-recurring expenses relating to the prepayment of FHLB advances and the consolidation of two branches, operating expenses decreased $504,000 for the quarter ended March 31, 2014, as compared to the quarter ended December 31, 2013, primarily due to a reduction of $401,000 in professional fees.

The provision for income taxes was $2.6 million for the quarter ended March 31, 2014, as compared to $2.4 million for the same prior year period. The effective tax rate was 35.3% for the quarter ended March 31, 2014, as compared to 35.1% in the same prior year period.

Financial Condition

Total assets increased by $32.0 million to $2,281.7 million at March 31, 2014, from $2,249.7 million at December 31, 2013. Loans receivable, net, increased by $29.5 million, to $1,571.0 million at March 31, 2014 from $1,541.5 million at December 31, 2013, primarily due to growth in commercial loans of $27.5 million and in residential construction loans, net of loans in process, which increased $5.8 million.

Deposits decreased by $26.6 million, to $1,720.1 million at March 31, 2014, from $1,746.8 million at December 31, 2013, despite strong growth in retail and business checking accounts. To fund loan growth and deposit outflows, Federal Home Loan Bank advances increased $57.3 million, to $232.3 million at March 31, 2014, from $175.0 million at December 31, 2013. Stockholders' equity increased to $216.2 million at March 31, 2014, as compared to $214.4 million at December 31, 2013. Net income for the period was offset by the repurchase of 88,000 shares of common stock for $1.5 million (average cost per share of $17.29) and the cash dividend on common stock. At March 31, 2014, 213,766 shares were available for repurchase under the stock repurchase program adopted in the fourth quarter of 2012. Tangible stockholders' equity per common share was $12.45 at March 31, 2014, as compared to $12.33 at December 31, 2013.

Asset Quality

The Company's non-performing loans totaled $45.3 million at March 31, 2014, a $39,000 decrease from December 31, 2013. Net loan charge-offs decreased to $526,000 for the quarter ended March 31, 2014, as compared to $1.1 million for the corresponding prior year quarter.

Conference Call

As previously announced, the Company will host an earnings conference call on Friday, April 25, 2014 at 11:00 a.m. Eastern time. The direct dial number for the call is (888) 317-6016. For those unable to participate in the conference call, a replay will be available. To access the replay, dial (877) 344-7529, Replay Conference Number 10043132 from one hour after the end of the call until July 25, 2014. The conference call, as well as the replay, are also available (listen-only) by internet webcast at www.oceanfirst.com in the Investor Relations section.

OceanFirst Financial Corp.'s subsidiary, OceanFirst Bank, founded in 1902, is a federally-chartered savings bank with $2.3 billion in assets and twenty-three branches located in Ocean, Monmouth and Middlesex Counties, New Jersey. The Bank is the largest and oldest community-based financial institution headquartered in Ocean County, New Jersey.

OceanFirst Financial Corp.'s press releases are available by visiting us at www.oceanfirst.com.

Forward-Looking Statements

In addition to historical information, this news release contains certain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 which are based on certain assumptions and describe future plans, strategies and expectations of the Company. These forward-looking statements are generally identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "should," "may," "view," "opportunity," "potential," or similar expressions or expressions of confidence. The Company's ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors which could have a material adverse effect on the operations of the Company and its subsidiaries include, but are not limited to: changes in interest rates, general economic conditions, levels of unemployment in the Bank's lending area, real estate market values in the Bank's lending area, future natural disasters and increases to flood insurance premiums, the level of prepayments on loans and mortgage-backed securities, legislative/regulatory changes, monetary and fiscal policies of the U.S. Government including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System, the quality or composition of the loan or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in the Company's market area and accounting principles and guidelines. These risks and uncertainties are further discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(dollars in thousands, except per share amounts)

March 31,

December 31,

2014

2013

(unaudited)

ASSETS

Cash and due from banks

$36,746

$33,958

Securities available-for-sale, at estimated fair value

39,261

43,836

Securities held-to-maturity, net (estimated fair value of $498,383 and $495,082 at March 31, 2014 and December 31, 2013, respectively)

Treasury stock, 16,208,313 and 16,179,723 shares at March 31, 2014 and December 31, 2013, respectively

(247,048)

(245,271)

Common stock acquired by Deferred Compensation Plan

(324)

(665)

Deferred Compensation Plan Liability

324

665

Total stockholders' equity

216,190

214,350

Total liabilities and stockholders' equity

$2,281,711

$2,249,711

OceanFirst Financial Corp.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

For the Three Months Ended,

March 31,

December 31,

March 31,

2014

2013

2013

------------(unaudited)------------

Interest income:

Loans

$17,246

$17,368

$17,664

Mortgage-backed securities

1,763

1,863

1,648

Investment securities and other

736

729

740

Total interest income

19,745

19,960

20,052

Interest expense:

Deposits

1,096

1,102

1,325

Borrowed funds

584

607

1,538

Total interest expense

1,680

1,709

2,863

Net interest income

18,065

18,251

17,189

Provision for loan losses

530

200

1,100

Net interest income after provision for loan losses

17,535

18,051

16,089

Other income:

Bankcard services revenue

791

909

810

Wealth management revenue

540

591

427

Fees and service charges

2,000

1,954

1,856

Loan servicing income

228

220

156

Net gain (loss) on sales of loans available for sale

132

287

(174)

Net gain on sales of investment securities available for sale

—

4

—

Net (loss) gain from other real estate operations

(32)

(49)

2

Income from Bank Owned Life Insurance

338

338

316

Other

1

29

16

Total other income

3,998

4,283

3,409

Operating expenses:

Compensation and employee benefits

7,685

7,747

6,578

Occupancy

1,464

1,458

1,363

Equipment

756

721

638

Marketing

532

490

250

Federal deposit insurance

546

543

524

Data processing

1,070

994

973

Check card processing

446

480

411

Professional fees

375

776

611

Other operating expense

1,389

1,558

1,317

Federal Home Loan Bank advance prepayment fee

—

4,265

—

Branch consolidation expense

—

579

—

Total operating expenses

14,263

19,611

12,665

Income before provision for income taxes

7,270

2,723

6,833

Provision for income taxes

2,563

784

2,397

Net income

$4,707

$1,939

$4,436

Basic earnings per share

$0.28

$0.12

$0.26

Diluted earnings per share

$0.28

$0.11

$0.26

Average basic shares outstanding

16,884

16,855

17,285

Average diluted shares outstanding

17,050

17,056

17,324

OceanFirst Financial Corp.

SELECTED CONSOLIDATED FINANCIAL DATA

(in thousands, except per share amounts)

At March 31,

At December 31,

2014

2013

STOCKHOLDERS' EQUITY

Stockholders' equity to total assets

9.47%

9.53%

Common shares outstanding (in thousands)

17,358

17,387

Stockholders' equity per common share

$12.45

$12.33

Tangible stockholders' equity per common share

12.45

12.33

ASSET QUALITY

Non-performing loans:

Real estate – one-to-four family

$27,486

$28,213

Commercial real estate

12,010

12,304

Consumer

3,731

4,328

Commercial and industrial

2,094

515

Total non-performing loans

45,321

45,360

Other real estate owned

4,457

4,345

Total non-performing assets

$49,778

$49,705

Delinquent loans 30 to 89 days

$9,137

$9,147

Troubled debt restructurings:

Non-performing (included in total non-performing loans above)

$10,217

$9,663

Performing

21,435

21,456

Total troubled debt restructurings

$31,652

$31,119

Allowance for loan losses

$20,934

$20,930

Allowance for loan losses as a percent of total loans receivable

1.31%

1.33%

Allowance for loan losses as a percent of total non-performing loans

46.19

46.14

Non-performing loans as a percent of total loans receivable

2.83

2.88

Non-performing assets as a percent of total assets

2.18

2.21

WEALTH MANAGEMENT

Assets under administration

$216,508

$216,144

For the Three Months Ended

March 31,

December 31,

March 31,

2014

2013

2013

PERFORMANCE RATIOS (ANNUALIZED)

Return on average assets

0.83%

0.34%(1)

0.77%

Return on average stockholders' equity

8.72

3.64(1)

8.06

Interest rate spread

3.31

3.33

3.08

Interest rate margin

3.36

3.38

3.16

Operating expenses to average assets

2.52

3.43(1)

2.21

Efficiency ratio

64.65

87.03(1)

61.49

(1) Performance ratios for the fourth quarter of 2013 include non-recurring expenses relating to the prepayment of Federal Home Loan Bank advances of $4.3 million and the consolidation of two branches into newer in-market facilities at a cost of $579,000. The total after-tax cost was $3.1 million.

OceanFirst Financial Corp.

SELECTED LOAN AND DEPOSIT DATA

(in thousands)

LOANS RECEIVABLE

At March 31, 2014

At December 31, 2013

Real estate:

One-to-four family

$748,647

$751,370

Commercial real estate, multi-family and land

550,808

528,945

Residential construction

37,852

30,821

Consumer

199,926

200,683

Commercial and industrial

66,196

60,545

Total loans

1,603,429

1,572,364

Loans in process

(13,991)

(12,715)

Deferred origination costs, net

3,618

3,526

Allowance for loan losses

(20,934)

(20,930)

Total loans, net

1,572,122

1,542,245

Less: mortgage loans held for sale

1,153

785

Loans receivable, net

$1,570,969

$1,541,460

Mortgage loans serviced for others

$794,530

$806,810

Loan pipeline:

Average Yield

Commercial

4.24%

$46,813

$58,992

Construction/permanent

4.02%

9,753

9,955

One-to-four family

4.26%

19,729

18,827

Consumer

4.04%

7,118

5,496

$83,413

$93,270

For the Three Months Ended

March 31, 2014

December 31, 2013

March 31, 2013

Loan originations:

Commercial

$52,482

$53,700

$18,438

Construction/permanent

10,416

16,209

3,590

One-to-four family

27,738

31,706

53,685

Consumer

13,379

12,059

11,130

Total

$104,015

$113,674

$86,843

Loans sold

$10,270

$18,222

$36,791

Net charge-offs

526

157

1,116

DEPOSITS

At March 31, 2014

At December 31, 2013

Type of Account

Non-interest-bearing

$218,124

$207,608

Interest-bearing checking

865,023

913,753

Money market deposit

123,701

116,947

Savings

297,739

290,512

Time deposits

215,544

217,943

$1,720,131

$1,746,763

OceanFirst Financial Corp.

ANALYSIS OF NET INTEREST INCOME

FOR THE THREE MONTHS ENDED

March 31, 2014

December 31, 2013

March 31, 2013

AVERAGE

AVERAGE

AVERAGE

AVERAGE

YIELD/

AVERAGE

YIELD/

AVERAGE

YIELD/

BALANCE

INTEREST

COST

BALANCE

INTEREST

COST

BALANCE

INTEREST

COST

(dollars in thousands)

Assets

Interest-earning assets:

Interest-earning deposits and short-term investments

$29,332

$6

0.08%

$34,566

$8

0.09%

$85,951

$26

0.12%

Securities (1) and FHLB stock

562,350

2,493

1.77

595,859

2,584

1.73

565,197

2,362

1.67

Loans receivable, net (2)

1,557,281

17,246

4.43

1,528,956

17,368

4.54

1,524,156

17,664

4.64

Total interest-earning assets

2,148,963

19,745

3.68

2,159,381

19,960

3.70

2,175,304

20,052

3.69

Non-interest-earning assets

115,855

127,852

118,148

Total assets

$2,264,818

$2,287,233

$2,293,452

Liabilities and Stockholders' Equity

Interest-bearing liabilities:

Transaction deposits

$1,322,358

363

0.11

$1,345,106

371

0.11

$1,330,639

563

0.17

Time deposits

215,710

733

1.36

213,337

731

1.37

221,200

762

1.38

Total

1,538,068

1,096

0.29

1,558,443

1,102

0.28

1,551,839

1,325

0.34

Borrowed funds

283,256

584

0.82

289,434

607

0.84

319,645

1,538

1.92

Total interest-bearing liabilities

1,821,324

1,680

0.37

1,847,877

1,709

0.37

1,871,484

2,863

0.61

Non-interest-bearing deposits

210,867

209,715

185,066

Non-interest-bearing liabilities

16,690

16,489

16,845

Total liabilities

2,048,881

2,074,081

2,073,395

Stockholders' equity

215,937

213,152

220,057

Total liabilities and stockholders' equity

$2,264,818

$2,287,233

$2,293,452

Net interest income

$18,065

$18,251

$17,189

Net interest rate spread (3)

3.31%

3.33%

3.08%

Net interest margin (4)

3.36%

3.38%

3.16%

(1) Amounts are recorded at average amortized cost.

(2) Amount is net of deferred loan fees, undisbursed loan funds, discounts and premiums and estimated loss allowances and includes loans held for sale and non-performing loans.

(3) Net interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

Easily Send & Share Press Releases

GlobeNewswire, a NASDAQ OMX company, is one of the world's largest newswire distribution networks, specializing in the delivery of corporate press releases financial disclosures and multimedia content to the media, investment community, individual investors and the general public.